Michael Burry Bets $1 Billion Against Nvidia, Palantir
Michael Burry places $1 billion in short bets against Nvidia and Palantir, challenging AI market optimism and raising concerns of a potential bubble.
Michael Burry Challenges AI Trade with $1 Billion Short Bets on Nvidia and Palantir
Famed investor Michael Burry, best known for his prescient “Big Short” bet against the 2008 housing market, has once again positioned himself as a contrarian voice in the financial world. In November 2025, Burry’s Scion Asset Management revealed over $1 billion in bearish put options against two of the most prominent players in the artificial intelligence (AI) sector: Nvidia (NVDA) and Palantir Technologies (PLTR). This move signals a major challenge to the prevailing optimism surrounding AI-driven stocks and raises fresh concerns about a potential market bubble.
The AI Boom and Record Valuations
Nvidia and Palantir have been at the epicenter of the AI investment frenzy in 2025. Nvidia, the world’s leading supplier of AI chips, reached a staggering $5 trillion market capitalization in October 2025, driven by surging demand for its GPUs and Blackwell architecture. Palantir, meanwhile, has seen its stock surge 169% year-to-date, with its market cap climbing to $471.6 billion. The partnership between the two companies, announced in October 2025, has further fueled investor enthusiasm. The collaboration integrates Nvidia’s GPU-accelerated computing and AI models into Palantir’s AI Platform (AIP), aiming to deliver real-time decision intelligence for industries such as logistics, healthcare, and finance.
Burry’s Warning: Echoes of the Dot-Com Bubble
Burry’s bearish stance is rooted in concerns about overvaluation and execution risks. In a series of social media posts, he drew direct parallels between the current AI boom and the 2000 dot-com bust. One post featured a highlighted page from a book describing the telecom bubble, noting an “extreme imbalance” where “less than 5 per cent of US telecoms capacity was in use” and “thousands of miles of expensive fibre optic networks remained ‘unlit’ beneath the ground.” Burry’s message is clear: the massive capital expenditures on AI infrastructure, such as Nvidia GPUs and cloud data centers, may be similarly overbuilt and underutilized.
Analysts have echoed Burry’s concerns. According to Simply Wall, Palantir’s stock is over 60% overvalued relative to its fair value estimates. Nvidia, while dominant in AI chips, faces scrutiny over potential regulatory headwinds, including worries about Chinese military use of its GPUs. Burry’s recent comments, including references to an “AI bubble,” further signal caution.
The Partnership and Market Optimism
Despite Burry’s warnings, the partnership between Nvidia and Palantir continues to drive optimism. Palantir CEO Alex Karp emphasized the partnership’s potential to “deliver immediate, asymmetric value to customers,” while Nvidia’s Jensen Huang highlighted the synergy of combining Palantir’s platform with Nvidia’s infrastructure. The integration of Nvidia’s CUDA-X libraries and AI models into Palantir’s AIP is expected to optimize AI workflows for complex operational pipelines.
Industry Impact and Implications
Burry’s short bets could have significant implications for the AI sector. If his concerns about overvaluation and execution risks are validated, it could trigger a market correction, particularly for high-flying AI stocks. However, if the partnership between Nvidia and Palantir delivers on its promises, the sector could continue to thrive, potentially justifying current valuations.
Conclusion
Michael Burry’s $1 billion short bets on Nvidia and Palantir mark a pivotal moment for the AI sector. As the AI race accelerates, Burry’s warnings about overvaluation and execution risks serve as a cautionary tale, echoing the lessons of the 2000 dot-com bust. The market’s response to these concerns will be closely watched, with potential implications for the broader technology landscape.
